Teachers to get interest rate debt relief from co-ops

Teachers to get interest rate debt relief from co-ops

More than half of the teachers’ cooperatives nationwide have reduced the interest on debts owed by teachers who are facing increasing financial difficulties, according to the Cooperative Promotion Department (CPD).

About 900,000 teachers collectively owe at least 1.4 trillion baht. Of this amount, 890 billion baht, or 64% of the loans, is owed to the teachers’ cooperatives, followed by 349 trillion baht to the Government Savings Bank.

The cooperatives, which are overseen by the CPD, have been trying to alleviate the teachers’ debt problems, said Wisit Srisuwn, the CPD director-general.

The department has secured financial support and know-how to sustain the cooperatives, which form an important financial lifeline for many member teachers, Mr Wisit said.

The CPD has signed a memorandum of understanding with the Education Ministry and 12 financial institutions to formulate a comprehensive plan to tackle teachers’ debt.

The plan involves revising the interest charged to teachers and bringing the rate down to around that offered by commercial banks. At the same time, the Education Ministry will advise cooperatives on how to streamline their operations.

Mr Wisit said so far, 70 of the 108 teachers’ cooperatives around the country had joined the interest reduction programme and managed to cut the rates by between 0.05% and 1%.

Of the 70 cooperatives, 11 were able to bring their interest rates below 5%, immediately benefiting at least 460,000 teachers whose debts stand at one million baht on average.

Mr Wisit said for every 1% of interest lowered, each teacher would see their debt go down by up to 10,000 baht per annum. He added that the department had issued cooperatives a guideline for assisting the teachers in controlling their debts.

He also dismissed calls by some members to be allowed to sell their shares in the cooperatives and take out their savings in them while still being able to continue borrowing from them. He said it was not legally possible to do so as the cooperatives were designed to encourage the teachers to have savings.